Supply Excellence — Pull-Demand: Driving Transformation by Selling Your Value

Pull-Demand: Driving Transformation by Selling Your Value

June 4th, 2007 · by Tim Minahan · No Comments · Supply Management 2.0 Forum, best practices, supply management

Ask anyone who’s been involved in any business improvement initiative what their biggest challenge was and most will say changing the culture and mindset of their people. Supply management transformation is doubly challenging because it typically requires driving change within the supply team as well as across other business functions, most of which view procurement as an impediment to getting their core jobs done.

This was the scenario Roll International faced last year. To make matters worse, the holding company for leading makers of pistachios, oranges, and popular beverages like Pom and Fiji water had to manage change across a diverse range of independent businesses, most of which had been picked up through recent acquisitions.

“When we started the [supply management improvement initiative], Roll had no processes, no supplier list, and limited tool use,” said Alvin Wong, Director of Strategic Sourcing. “And because the businesses were so diverse with different cultures we really couldn’t dictate how the process would work. We couldn’t push [new processes and systems] down on them”

So Wong and his team applied traditional sales and marketing approaches that could best be summed up as follows:

Assess internal customers’ needs
Create supply management service offerings that addressed these needs
Landed the first “customer” on which to prove out the value of the defined service offering
Market early “customer” successes to create demand for their supply management services

The initial assessment uncovered the need to demarcate between strategic supply management and tactical procurement operations. Said Wong: “The businesses wanted to run their own procurement operations. And we said, ‘Absolutely.’ It’s not in our best interest to get tied up in doing POs and day-to-day transactions. We want to focus on long-term strategic objectives of how strategic sourcing and supply strategies can help the business.”

Next, Wong and his team set out to develop the processes, skills, and systems infrastructure that could deliver best-value contracts, supplier performance, and risk management capabilities to help the businesses run their daily procurement operations more efficiently and effectively. Enabling this strategy was a common supply management automation platform, integrating strategic sourcing, contract and compliance management, and supplier performance management activities.

Without a mandate, Roll’s supply team had to sell the value of this new supply management infrastructure as a service that was available to help the businesses meet their own goals. Wong said the basic tenant of this “Pull-Demand” concept was the “desire to make things easier and improve the business. Pull-Demand is connecting the [supply management tool] with that desire within the business so that they want the tools; so they are lining up and asking for our services.”

Wong said his team was out to educate the businesses that “reverse auctions are but one tool in the overall toolbox for sourcing effectiveness.” His group developed process templates to enable suppliers to register and manage their profiles and capabilities information – including diversity, certification, and product catalog data – all through a self-service, Web-based portal. “We can provide one single point for suppliers to interface [with the businesses]. It is a quick way for suppleirs to pre-qualify themselves and let the businesses review for use.”

When the program was launched last July, one of Roll’s smaller business units was willing to adopt the supply management tools to improve visibility into supplier contracts and performance. The division also tapped Roll’s supply team to manage online sourcing projects, delivering some immediate savings that could be marketed to the other businesses.

Roll’s supply management team has delivered more than just tactical sourcing savings. The group has helped assess supplier capabilities, market opportunities, and mitigate risks. For example, when the price of blueberries went through the roof, Wong’s team did a market assessment and found that the crop was bad and there was no way to hold down prices. “We worked with the businesses to recommend a strategy to change the product mix to use different types of berries,” said Wong.

Through stealth marketing these and other successes, Roll’s supply team successfully pulled demand for the new tools and processes from other divisions. “After seeing what we can do to help them with their goals — and by not pushing a process upon the business — now everybody wants us playing. We are now using the tool to help the businesses self-serve themselves on smaller projects, so we can manage the larger, long-term, and more strategic activities.”

Roll’s success demonstrates that it is possible to drive supply management change without a mandate.

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